Background: The universal common ancestry (UCA) of all known life is a fundamental component of modern evolutionary theory, supported by a wide range of qualitative molecular evidence. Nevertheless, recently both the status and nature of UCA has been questioned. In earlier work I presented a formal, quantitative test of UCA in which model selection criteria overwhelmingly choose common ancestry over independent ancestry, based on a dataset of universally conserved proteins. These model-based tests are founded in likelihoodist and Bayesian probability theory, in opposition to classical frequentist null hypothesis tests such as Karlin-Altschul E-values for sequence similarity. In a recent comment, Koonin and Wolf (K&W) claim that the model preference for UCA is "a trivial consequence of significant sequence similarity". They support this claim with a computational simulation, derived from universally conserved proteins, which produces similar sequences lacking phylogenetic structure. The model selection tests prefer common ancestry for this artificial data set. Results: For the real universal protein sequences, hierarchical phylogenetic structure (induced by genealogical history) is the overriding reason for why the tests choose UCA; sequence similarity is a relatively minor factor. First, for cases of conflicting phylogenetic structure, the tests choose independent ancestry even with highly similar sequences. Second, certain models, like star trees and K&W's profile model (corresponding to their simulation), readily explain sequence similarity yet lack phylogenetic structure. However, these are extremely poor models for the real proteins, even worse than independent ancestry models, though they explain K&W's artificial data well. Finally, K&W's simulation is an implementation of a well-known phylogenetic model, and it produces sequences that mimic homologous proteins. Therefore the model selection tests work appropriately with the artificial data. Conclusions: For K&W's artificial protein data, sequence similarity is the predominant factor influencing the preference for common ancestry. In contrast, for the real proteins, model selection tests show that phylogenetic structure is much more important than sequence similarity. Hence, the model selection tests demonstrate that real universally conserved proteins are homologous, a conclusion based primarily on the specific nested patterns of correlations induced in genetically related protein sequences. Reviewers: This article was reviewed by Rob Knight, Robert Beiko (nominated by Peter Gogarten), and Michael Gilchrist.